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The Week Ahead On Wall Street

(Kitco News) - A shortened trading week because of Easter coupled with little U.S. economic data means the gold market will be led by outside markets, according to some analysts.

The yellow metal is closing what was a volatile week in positive to neutral territory. After falling to a two-week low at the start of the week, gold received a major boost after the Federal Reserve monetary policy meeting Wednesday. The central bank left interest rates unchanged and signaled that it plans to raise rates only twice this year, down from their December forecast for four hikes.

However, the market has been unable to hold onto its gains as April gold futures settled the week at $1,254.3 an ounce, up only 0.27%. Despite gold inability to test last week’s 13-month high, expectations for higher prices among retail investors remain strong. On the flipside, sentiment among market professionals is starting to diminish.

While gold was lackluster, silver saw decent gains, briefly pushing above $16 an ounce during the week. Comex May silver futures settled the week at $15.855 an ounce, up 1.9%.

Kitco’s Wall Street vs. Main Street Gold Survey Friday showed that 78% of online participants said they were bullish on prices next week; meanwhile, only 47% of market professionals said they expected to see higher prices.

George Gero, managing director at RBC Wealth Management, said that although the Fed was more dovish than expected, it looks like the gold market has gotten a little bit ahead of itself.

“Pretty much everything is now priced in and we are going to have to wait for some new news to see which direction gold heads,” he said.

He added that he could see continued consolidation around the $1,250 level next week as investors continue to digest the latest decision by the Federal Reserve. Gero also warned that gold now has to compete with an improving oil and equity market.

“Financial markets have improved and people are feeling a little bit more optimistic and are not needing a safe haven, so that could hurt gold,” he said.